Term Paper on "Application of Organizational Behavior"

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2. Organizational Behavior at Wal-Mart

Wal-Mart was founded in 1962 in Rogers, Arkansas by late Sam Walton and it quickly became a favorite destination for the American consumers. The corporation runs a chain of large stores, basically supermarkets, but also additional facilities, that operate on an international scale. The basic strategy implemented by the management at the Wal-Mart Stores was that of offering their customers the lowest possible prices on the market. The company's logo is "Save money. Live better" (Official Website of Wal-Mart, 2008). Along the years, the multinational organization has been the target of both intense praising but also fierce criticism, often materialized in lawsuits. The primary accusations brought against the retail giant revolved around an unfair treatment of the employees (not in the meaning of discrimination practices, but rather in the meaning of offering insufficient payments and benefits). Then, more recently, Wal-Mart has also been the subject of negative comments coming from the customers, who do indeed desire the lowest prices and continue to shop at Wal-Mart, but they also desire an acceptable quality of the purchased merchandize. And they do not always receive it because the company is increasingly centered on offering the lowest prices and therefore cuts costs in other departments. For instance, since the employees receive generally low incomes and limited benefits, they lack the motivation to increase their performances, and as such, the services they offer to the end consumers are rather poor. Then, in terms of product quality, the stores import the items from the cheapest countries and the transport conditions are not always among the best, resulting in a low quality of the products on the shelves. But despite the complaints received, the company emphasizes on the benefits they offer the employees to motivate them, on the strong corporate culture and onto the human resource policies they implement to increase the staff's on the job satisfaction.

Motivation

Motivating their staff is crucial at Wal-Mart moreover since the employees are the linkage between corporate management and end consumers. In other words, regardless of the lowest prices, there are other supermarket chains that implement similar strategies and if presenting the customers with other incentives, could easily draw them from Wal-Mart. Therefore, offering the lowest price is not sufficient and the organization also has to offer high quality products and services; the latter are directly dependent upon the satisfaction of the employees and their level of commitment to the organization; ergo the need to motivate them.

The day at an American Wal-Mart commences with the gathering of all staff and a Morning Cheer. The picture below presents former chief executive David Glass showing "the sales team how the well-known Wal-Mart 'Morning Cheer' should be done. Allegedly, the ritual has proved more popular in the U.S. than it has with Wal-Mart's staff in Germany" (Kliger and Tweraser)

Source: Kliger, M., Tweraser, S., Motivating Front Line Staff for Bottom Line Results, McKinsey & Company

The Morning Cheer is a practice at the stores that occurs every morning at it is aimed to increase the morale of the sales staff. This will then keep them happy and joyful throughout the day, making them more attentive and willing to help the customers. However the general idea of the Morning Cheer is rather useful in essence, it does not always occur within all stores and sometimes fails to achieve the desired outcome.

But aside from the special Wal-Mart cheers, the organization also offers a wide set of incentives that are aimed to increase their associates' on the job satisfaction. For instance, in 2007, the company "improved and aligned compensation, increased leadership development and created a store manager council to ensure greater visibility for grassroots feedback from our associates" (Wal-Mart 2007 Annual Report). Another relevant strategy is that of integrating the staff into the decision making process and allowing them more rights and responsibilities - but this will be further discussed in the section for Human Resource Policies. Then, the company implements promotional strategies. This basically means that according to their performances, the employees are eligible for promotions in higher and even managerial positions. "Today, our worldwide workforce consists of more than 1.9 million associates. In several countries, a majority of our management team is comprised of associates who have advanced through the ranks. It is this opportunity to move ahead that makes working for Wal-Mart attractive to associates, as well as to external talent" (Wal-Mart 2007 Annual Report). The strategy ensures that the associates increase their performances as they are motivated by a better qualified and better paid position within Wal-Mart.

Other incentives promoted by the retail giant refer to the cherishing of the employees' diversities and also the offering of training programs that support the professional formation of associates.

Corporate Culture

The primary aim of Wal-Mart's remains to offer their customers the lowest possible prices, but their strategy has been added with other various approaches. In this particular instance, the multinational retail chain places a greater emphasis on the satisfaction felt by the staff and the clientele. Through generalization, the company places a greater focus on the satisfaction of the stakeholders' needs and wants. In this particular instance, several new methods have been implemented and they revolve around the following:

increased attention to details and a better satisfaction of the customers' needs through the offering of qualitatively superior products and services better and more training programs that help the staff, the customers and the organization as a whole the enlargement of the product offering; in 2007, the stores offered more organic products than ever increased focus on the communities; Wal-Mart has often been accused of closing down the local mom and pop stores, but the company has supported the development of the communities where it operates through the creation of jobs and the organizing and sponsoring of several social events the usage of superior technologies that make the work of the staff easier and which also increase the efficiency of the operational process, all to the benefit of the company and its stakeholders modifications also become present in the process of identifying the most suitable suppliers and the primary criteria is no longer the lowest price, but a combination of price efficiency and high quality

Human Resource Policies

During the few past years, Wal-Mart has understood the importance their staff plays in achieving the overall corporate goals. Tim Gebauer, store manager for the Mason City Wal-Mart store points out that the primary strategy is that of using their resources at a maximum possible. And an important corporate resource is the personnel, who stores large amounts of data that is vital for the organization. "They know their piece of this business better than I do (says Gebauer). One of the most important keys to developing your business is to simply make use of the tremendous resources of experience and knowledge that are already within your organization. The knowledge locked up in their [employees'] heads is the big resource. Computers and technology we use every day, but what's up in somebody's head - that's what can make a huge difference in how we use the technology.They come up with some pretty innovative solutions sometimes!" (Tim Gebauer, quoted in an article for the HR Made Easy).

Then, as they become aware of the importance played by their human resource, the management at Wal-Mart began to assign them more responsibilities and to allow and even encourage them to get involved in the decision making process. Work Motivation Incentives… READ MORE